Rio Tinto directors admit ‘regret’ over slow Alcan Packaging sale

Speaking at the group’s annual general meeting last week, Guy Elliott, chief financial officer at Rio Tinto, said that the company was considering selling the packaging and engineering units in small parts to attract investors.

At the same meeting, Rio Tinto chairman Paul Skinner said he had “regrets” over the handling of the $38bn acquisition of Canadian mining group Alcan in 2007, which brought with it the packaging business – a division that Rio Tinto had no intention of holding.

“When I reflect back I concede that some things could have been done differently. We did not move fast enough to dispose of Alcan’s packaging business before the downturn,” Skinner said.

Skinner’s comments came at his last AGM before Jan du Plessis, the chairman of British American Tobacco, took up the role of chairman at Rio Tinto Alcan this morning.

The comments have given rise to more speculation that a sale of the Alcan packaging business is imminent.

Amcor is currently understood to be the frontrunner for the acquisition after it said in February that it was in talks with Rio Tinto regarding a possible buy-out of part of the Alcan Packaging business, which Rio Tinto acquired in its $38bn takeover of rival miner Alcan in 2007.

Analysts have now begun speculating over the price that Amcor could pay. Royal Bank of Scotland speculated last week that Amcor could pay $2bn for the food packaging business or $2.2bn for Alcan’s food packaging business in Europe as well as its tobacco, pharmaceutical and medical packaging divisions.

One source told Packaging News: “It is clear that given the current market, the price is lower than it might have been.”

Macquarie Equities, another analyst, has said that Amcor’s recent share-price rise – its value has gone up more than 30% since early March – would make the acquisition even more attractive for Amcor.

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